FCC Eliminates Main Studio Rule on 3-2 Split

The FCC approved elimination of the main studio rule 3-2 Tuesday over the expected objections of Democratic Commissioners Mignon Clyburn and Jessica Rosenworcel (see 1710130054). Rosenworcel also voted against a plan to tweak broadband-service spectrum rules (see 1710240050). This main studio deregulation will “hollow out the unique role broadcasters play in local communities,” said Rosenworcel. Broadcasters can help communities in times of crisis, but “they can only do so when they have a real presence in their area of license,” she said. “Why would an industry that repeatedly extols the virtues of its local roots want to eliminate their only real connection to that very same community?” Clyburn said.

Clyburn and Rosenworcel said they advocated for a waiver process that would provide relief for smaller broadcasters burdened by the requirement but were rebuffed. “The overwhelming majority of public input favored our proposal,” Chairman Ajit Pai said. “The record shows that main studios are no longer needed to enable broadcasters to be responsive to their communities.”

Clyburn said Pai's office repeatedly “vetoed” proposals to consider market size and economic hardship in granting waivers of the existing rule, and to condition elimination of the rule on broadcaster commitments to spend savings on services beneficial to consumers. “The NPRM in fact suggests that the savings could be used for such purposes, so why not tie the two together?” Clyburn said. “I wish we would have agreed to simple waivers for the main studio rule anytime it would allow small- and mid-sized stations to keep the lights on and continue to offer service to their communities of license,” Rosenworcel said. Clyburn referenced a column by Newsmax CEO Chris Ruddy connecting the main studio rule with media consolidation (see 1710240049). “Most of the benefits cited for eliminating this rule will flow to broadcast station groups that are already experiencing record revenue returns,” Clyburn said.

Getting rid of the rule will help broadcasters in small towns and rural areas and make it easier for broadcasters to launch stations there, Pai said. “Continuing to require a main studio would detract from, rather than promote, a broadcaster’s ability and incentive to keep people informed and serve the public interest.” The “regulatory relief” eliminating the rule will provide “could translate into tens of thousands to hundreds of thousands of dollars every year in savings, particularly for smaller and rural broadcasters,” said Commissioner Brendan Carr. “There has been no causal effect much less any correlation shown between the maintenance of this rule and the quality of programming or the amount of local content,” said Commissioner Mike O’Rielly.

The draft order is little changed from the version originally circulated, Media Bureau Chief Michelle Carey told us. It eliminates the requirement that stations keep a main studio in their community of license, and associated staffing requirements, she noted. Stations will have to maintain a local or toll-free phone number in their communities of license, and those that haven’t completed the transition to online public files have to keep their public files in a publicly accessible location in their community of license, such as a library, the bureau said.

Eliminating the rule won’t lead to main studios going away in many cases, blogged Pillsbury Winthrop broadcast attorney Scott Flick. “For most stations, main studios will continue to be useful hubs for organizing programming and operations.” Flick conceded some broadcasters will close studios to cut costs. “In an era when competition from the Internet and other media has caused numerous rural stations to shut down and mail their licenses back to the FCC, allowing a station to operate without a main studio certainly seems preferable to forcing it to go dark because it can't meet studio expenses,” he said.

“Chairman Pai has given another massive handout to his friends and political allies at Sinclair,” said Free Press Policy Analyst Dana Floberg. "The Commission has blasted open a path for conglomerates like Sinclair to move even more resources -- including broadcast facilities and staff -- away from underserved communities.” The main studio rule is a “textbook example of a market entry barrier whose deregulation serves the public interest,” said Multicultural Media, Telecom and Internet Council President Kim Keenan. “The rule drove capital away from multicultural broadcasters who were unable to operate as efficiently as other broadcasters who could house more stations in a single main studio.”

Meeting Notebook

Making draft versions of FCC meeting items publicly available is officially no longer a pilot program but official policy, Pai said during a news conference Tuesday. The policy has been a “tremendous success,” he said. "We haven’t yet had the chance to sit down and think about extending it to circulation items. That’s something that I’d certainly be interested in discussing with my colleagues and working with the commission staff to determine the feasibility and benefits of doing so.”

Opponents of Pai’s agenda want him distracted by “the controversies of the day,” the chairman said Tuesday in response to repeated reporter questions about President Donald Trump’s tweets (see 1710110075) about the possibility of NBC losing its “license” over reporting “fake news.” Pai said he will stay focused on his agenda, and he’s committed to the First Amendment and that the FCC won’t go after a broadcast license based on the content of a particular newscast. He declined to comment directly on the president’s tweets. The Trump administration hasn't been in contact with the FCC about the tweet, Pai said. Asked why he waited days after the tweet to address the issue, Pai said he responded the first time he was personally asked publicly (see 1710170022).

FCC members approved updates to rules for hearing aid compatibility and volume control on wireline and wireless phones. O’Rielly and Carr partially dissented, questioning why the FCC needed to adopt a requirement that within three years, all hearing-aid compatible (HAC) wireless handsets include volume controls. The vote was one of the first times since Pai became chairman that objections came mainly from fellow Republicans. The two objected only to the new wireless volume-control standard. The FCC shouldn’t impose such standards on industry, O’Rielly said. “Just because we have done it before doesn’t mean that we should continue to do so,” he said. “While they can sometimes be effectively used as a safe harbor, standards set by appropriate industry bodies should be allowed to evolve without commission involvement or approval.” The order recognizes industry already is working on a standard for wireless volume control. “So, I must ask -- why are we implementing rules now?” he said. “We should allow industry to implement this standard and then see if there is evidence that problems persist.” Carr has similar concerns. “While I appreciate the importance of volume control standards … the order does not adequately justify imposing this,” he said. The cost-benefit analysis in the order doesn’t account for all the costs imposed, he said. “This uncertainty means that we should seek additional comment rather than proceeding directly to a rule.” Pai said HAC rules are important since some 13 percent of Americans are deaf or hard of hearing. “The Commission continues its efforts to ensure that tens of millions of Americans with hearing loss have access to and can benefit from critical and modern communication technologies and services,” said a news release. The order also adopts an updated volume control standard for wireline handsets and imposes HAC requirements on VoIP handsets, officials said Tuesday. The order eliminates what was considered to be an outdated standard for RF interference reduction and magnetic coupling with wireless phones.

Clyburn was critical of, but voted for, an NPRM on relaxing or repealing requirements that broadcasters provide notice of upcoming deals in newspapers, and filing requirements for broadcast ancillary services (see 1710050057). She was the only commissioner not to fully support the item, concurring on the matter of notice requirements. “Doing so is a horrible idea, with no discernable benefit to consumers,” she said of the proposal to relax notice rules. “The very notion that the public’s first instinct is to check a station’s website to find out if they have filed a license application is absurd,” Clyburn said. The idea that the public would sign up for RSS feeds to receive information about upcoming mergers is “even more ridiculous,” Clyburn said. “In 2017, Americans access and consume information in dramatically different ways (Google it if you don’t believe me),” Pai said. “We hope that the public will tell us whether we should update these requirements to match the modern age or, alternatively, whether we should repeal them.” All commissioners supported the proposal to seek comment on changing the filing requirements for broadcast ancillary services to allow only broadcasters that have received such fees to file an annual form. “In 2016, of the more than 6,600 broadcasters who were required to file this form, the Media Bureau identified less than 15 stations that reported receiving revenue from their ancillary or supplemental service last year,” O’Rielly said.

The FCC unanimously adopted an order to relax international reporting duties by eliminating annual telecom traffic and revenue reports and streamlining circuit-capacity filings by providers. Instead of the annual traffic and revenue reports, the commission said it could rely, as needed, on targeted collection of information and commercial data, said a release. Pai said the benefits of the annual reports, first required in 1941, "are scant" but the provider burdens "are anything but." One provider said it took at least a dozen employees more than 600 hours over four months to compile report information, Carr said. While keeping the circuit-capacity reports to help fulfill national security and public safety responsibilities, including of other agencies, the agency eliminated a requirement that carriers file circuit data for terrestrial and satellite facilities. O'Rielly said he "would have liked to have gone further in some places" to relax duties "but there are reasons we can't," deferring to "national security experts." Pai quipped: "Patience, young grasshopper." The Department of Homeland Security had urged the FCC to keep undersea cable circuit capacity duties (see 1709250048). AT&T had voiced concern "least cost routing" could be compromised by a draft rule requiring public disclosure of certain confidential route information (see 1710170024). The adopted order requires “each facilities-based international service provider to complete a confidential one-time filing, updated as appropriate, listing the routes on which it has termination arrangements with a carrier in the destination foreign country,” said Kimberly Cook, an International Bureau attorney. AT&T didn't comment Tuesday.

Commissioners approved 5-0 rules making it easier for law enforcement authorities to gain access to blocked Caller ID information when needed to identify and thwart threatening callers. The FCC created “an exemption to a rule prohibiting carriers from disclosing blocked caller ID information,” said a news release. “Threatened organizations will no longer need to get a waiver from the rule on a case-by-case basis, enabling quicker investigation of threatening calls.” The order follows a June NPRM also approved unanimously (see 1706220023). In April, the Consumer and Governmental Affairs Bureau granted Jewish community centers an emergency waiver to allow law enforcement to trace a wave of bomb threats (see 1703030062). “The rash of threatening phone calls placed to many Jewish Community Centers earlier this year highlighted a disturbing trend -- the number of threatening phone calls is on the rise,” said Pai. Clyburn tied the order to events 60 years ago when some black students received nightly threatening calls after they integrated Central High School in Little Rock, Arkansas. “What if Caller ID existed then and the identities of the perpetrators of these threatening phone calls were quickly shared with law enforcement personnel?” Clyburn asked. “I like to think through a current lens, it would have made a difference.”

Commissioners approved 5-0 a nationwide number portability (NNP) item with two notices aimed at allowing consumers to keep their phone numbers wherever they go. An NPRM proposes to eliminate rules that could be barriers to NNP, and a notice of inquiry seeks comment on various proposed mechanisms, including from the North American Numbering Council, the agency said, without indicating any major changes from a draft. NNP "would level the playing field for small wireless providers, which often can’t port in a number originating from a location where they lack facilities," and it "would eliminate disparities that make wireline and VoIP porting more limited than wireless porting," said an agency release. O'Rielly noted some had cautioned NNP "could prove costly for certain providers." Carr thanked colleagues for incorporating questions about any 911 call impact. NTCA said it had raised questions about an NNP transition (see 1710160031).

There’s no particular end date for FCC presence in Puerto Rico, Pai said during a news conference Tuesday after being asked about Trump’s assertion that aid there could be provided for only a limited time. “We are working collaboratively” with the Federal Emergency Management Agency “to see what assistance they need,” Pai said. He said the FCC would have a presence on the island for “some time to come.”